What Types of Debts Cannot Be Discharged in an Arkansas Chapter 13 Bankruptcy?

The types of debts you have incurred can affect your bankruptcy differently. Here’s a handy guide.

Chapter 13 is a type of bankruptcy focused on restructuring debt to pay it off. Individuals with regular income, whether from employment, social security, or sole proprietorships, can submit a reorganization plan that will outline how to pay back their creditors over a period of three to five years. By selling off assets and streamlining operations, the debtor can keep the assets that matter most to them. Chapter 13 is a complicated form of bankruptcy, however, and the rules that govern it are very specific.

Types Of Debt

Not all types of debt are created equal. Some are treated with a higher priority than others and cannot be discharged through bankruptcy. Furthermore, there are secured and unsecured debts that relate to collateral. A secured debt is one that the debtor has put up collateral to obtain. Secured debt is only discharged in a bankruptcy case if the debtor surrenders all rights to the collateral. Otherwise, the debtor must use their reorganization plan to pay off the secured debt.

What Types of Debt Are Discharged During Chapter 13?

Once the repayment plan is complete, you will receive a discharge of all remaining qualifying debt. The types of debts that are discharged in Chapter 13 are similar to those that are discharged in Chapter 7, with only a few differences. These include unsecured loans like credit card debt, medical bills, personal loans not secured by collateral, and breach of contract or negligence-related debt. Debts that are dischargeable with Chapter 13 but not Chapter 7 include those arising from property settlements in divorce proceedings, debts for willful or malicious property damage, and debts incurred to pay nondischargeable tax obligations.

What Types of Debt Are Not Discharged During Chapter 13?

As we learned above, secured debts are only discharged during Chapter 13 bankruptcy if the collateral is surrendered back to the creditor. These debts are either subjected to reorganization and paid off, or the creditor seizes the collateral associated with them. Other types of debts that must be paid during Chapter 13 include those that are considered priority fees. These are debts like those incurred during the bankruptcy process, those associated with alimony or child support, criminal fines or penalties, and civil judgments against you from DWI convictions or fraud.


For a better understanding of which of your debts will be discharged and which will not contact the bankruptcy experts at Natural State Law, PLLC at (501) 916-2878.